tv Fast Money Halftime Report CNBC November 5, 2013 12:00pm-1:01pm EST
greg writes, kindling closer family relations. we do love jeff's laugh. it's one of the great laughs in american business. >> and i love a pun with the kindle there. appreciate it. >> thanks to david ortiz. wasn't that fun? it really set the floor on fire today. the dow is down about 16, continues to shave some of the losses. let's get over to post 9 and wapner and halftime. here's what we're following today -- #bigwin. it scores the big ipo and what it means for business and investors, from the man at the top, ceo duncan niederhauser. the great debate after a new ceo and big runner, shares of groupon a daily deal for investors. or buyer beware? we start with the question all of us are wondering, is the rally sustainable? history suggests yet. in the past 50 years, only four other times that the s&p 500 has risen more than 20% in the first 10 months, and in each of those times, november brought even more gains. but what about this time?
is there too much euphoria over stocks? some say yes. is the taper talk going to end the run? some say it will. and what about the risks in europe? some say they are under estimated. it's "the half," and let's play the action from post 9. josh brown, is the rally sustainable? >> i think yeah. i've pointed continually throughout the course of this year to one thing and one thing only as a shorthand for whether or not this rally can continue, and that's been breadth. looking at market internals, and there's a lot of different ways to do it, has kept you long this tape, even during the taper, even during some of these spasmodic episodes, but i think right now, if you look sector by sector by sector, for the first time since 1995, all ten are up double digits for the year. and that says further strength on a internal basis. why would you look for a countertrend move? >> joe, what keep it is going? >> what keeps it going, i think
the continuance of favorable economic news, and manager downsize. use 1,729 as a point of reference. i've mentioned that before. that's the previous high from september. and look internally at some of the names where you will see a little of the depreciation slow like an apple, which seems to have stalled out. i would say there's plenty of upside opportunity. we talked last week about ibm on the strong buyback. i would be building a position here as ibm seems to be easing back. and lastly, there's this disconnect. oil prices, scott, for the quarter are down 8.5%. you would think the energy names would be down accordingly. they are up. the xle up 4.5%. that's good. >> steve weiss, does it continue, and what keeps it going? >> it does continue. and what keeps it going is the bond market. and the economy. so we saw an ism number that came out today better than expected. bonds, rates are backing up. it is the only game in town, remains the only game in the global town. so that's what keeps it going. could we see 3%, 5% down?
absolutely. but at the end of the year, we're going to get an early january effect again, and the market will hit new highs. >> the question dan nathan, is there too much euphoria over this market? people have used the bubble word, tobias at citi, with a note questioning the euphoria in the market, saying that firm's proprietary sentiment tracker has climbed to its highest level since 2008, now approaching euphoria territory. which is worrisome. >> yeah, i mean, there's been a lot of talk about bubbles in the last week. we heard larry fink refer to possibly equities being that way. i lived through a couple of bubbles. it doesn't feel that way, to be honest with you, right now. it feels like, if we're probably -- if we want to look at the late '90s, it feels like maybe mid to late 1998. i don't see the euphoria across all sectors, but certainly in specific stocks. in a lot of web stocks and some of the things like -- the pockets that josh is a huge fan of the digital printers and stuff like that. but it's not widespread at this
point. and i would just make one last point, though. these guys are all really constructive. i agree 1,700 on the downside is the near term if we get a 3.5% pullback. but let's just talk about the eu said today. they're expecting 1% growth next year. where do the multinationals that we invest here in the u.s. get a disproportionate amount of their sales? from europe. we're in a slow-growth environment at the five years into this unprecedented easing. >> let's not underestimate the risks that are out there. >> right. >> and there are some. however, it brings me back to the "don't fight the tape, don't fight the fed," and whether those two notions are more powerful than anything else that can be seen at the moment by investors. >> of course, it is. it's a massive sea of liquidity, the cost of capital, the companies, it continues to work in their favor. commodity costs are moving lower. let's not make the mistake of thinking that euphoria -- euphoria implies the end of this five-year bull market. let's not make that mistake.
potentially, a correction is ahead of us, yes. but what is on the other side of the correction, i think opportunity. >> don't beat the ecbi either. mario dragi, the inflation ticked down. it's close to disinflation. so you're going to see, i believe, dragi come out, if he doesn't he's, he's bernanke-ize the market, saying i'll stay where i am for a long time. >> i like that term. we'll be talking about that in the weeks and months ahead. if the rally does take a pause. the next guest thinks it will give those who missed the run a chance to get in. barry banister is live in baltimore. welcome back to the show. good to talk to you, as always. >> thank you. >> you're looking for more upside. why? >> well, we're actually looking at the s&p leveling out, well into 2014, where i think you can make money is on a global gdp bet. the energy, materials, industrials, and technology typically do very well in the year leading up to the first rate hike by the fed. so we're probably a good year away from that, of course.
therefore, it looks pretty good for the sectors. >> yeah. cyclicals are a place you want to go. risk on, global growth, though you've heard the fellows on the panel here talking about the concerns that seem to be resurfacing in europe and elsewhere. >> well, i think his comments are actually fairly positive. i'm starting to see a little less austerity. the german election did not yield a decisive win for merkel, to form an easy coalition. china's put a floor under growth. the united states is probably going to have less fiscal drag next year. overall, it looks pretty good for an acceleration of global gdp, so those are the stock groups you'd want to look at. >> barry, it's josh brown. i'm with you on the rotate into cyclicals trade. we started to overweight things like chemicals earlier in the summer. people are under this impression they need some kind of a catalyst in order for this sector of the market to move. but isn't the valuation, which is so cheap relative to other areas, catalyst enough to be
rotating into things like steel, for example? or chemicals? could you speak to that a bit? >> well, i'd go more into the basic raw materials, not the companies that use them and cost of goods sold. i'd be looking at things like metals mining, coal mining, energy e&ps for a gas move, things like that. it seems to me what's happening out there right now is because growth looks like it's going to accelerate, you'll get a nice move in the valuation well before the actual results improve for a lot of the stocks. the valuations are pretty reasonable. >> barry, what about all of the talk of late about a bubble? too much froth. a build in euphoria that is going to eventually come back to haunt this market. >> well, you know, i've been on this show since last year, and i was talking then about 1,600, then 1,700. now that the market's there, i sense a little bit of a leveling in the market, because people have climbed the wall of worry. but within the sector rotation, the p/e recipients would be the
cyclicals and the p/e donors would be some of the high-p/e defenses, and even the financials, which have lived off of reserve reversals and aren't seeing a great deal of long growth. i would go into industrial and go dirty. >> and you're confident that the market can withstand the taper whenever it does come? >> you know, it's interesting. i think the taper is a little bit like approaching a kid with a needle at the doctor's office. the first time, it's a shock. the second time, we go to it, it won't be a big deal. i think we -- >> i don't know, you've never been to the pediatrician with my kids, barry. every time the needle comes out, it's a scream fest. >> well, what's interesting is i think more -- the adults in the market are realizing that the taper's coming and the fed actual rate hike off zero bound is probably the next big event. and since that's over a year away, i'm not too worried about it at this time. i'm more watching global gdp's indicators, which do look like they're perking up here. >> barry, we'll talk to you again soon. thank you so much. >> thanks.
>> barry banister, stifel, nicolaus. dan nathan, what do you make of his comments? >> that's the thing. you want to see what keeps the thing going, as we see upside surprises, and in the e.u., .2% gdp growth. if we see the unemployment and the growth go up, you'll see the markets continue to go. so to me, i think there's better places to be in the u.s. i think we've discounted, gotten in front of a lot of this stuff -- >> such as where? >> europe could be one. europe just really started taking off this past summer. you know, when you look at the relative outperformance of european equities to the u.s. in that time period, that story has some legs, if they start to get -- >> well, that's the real question, right? whether that move, and a big one as it was, has run its course in the near term? >> have you seen the data on british expansion, for example? are you seeing those numbers? have you seen the fact that spain is now emerged from recession and is back into, you know, what we'll call growth for now, charitiably. but these are countries where we were expecting nothing from, for
years and years and years. six years of recession in greece. that's what's changed, and psychologically, we don't adjust our portfolios overnight. it's a process, and that's why you're seeing the stocks trending higher. >> let's do the top three trades. a lot of stocks on the move. the first one is tenet health care, the day's worst performing health care stock, after reporting a 30% drop in q3 profits, mr. weiss. >> i have the distinguished honor some of today's pick, and bought some more. looked like the euro moved up. i thought this would be a weak quarter. it far exceeded my expectations in terms of how weak the cash flow was and the guidance going forward. nonetheless, i'm sticking with the position. it's an obama care play. it's a good one. i would own it going forward. it's a good price. >> let's talk some hertz. beating expectations, but the stock is getting hit. >> can i tell you? the market is dead wrong here, and i think the stock is a buy.
i have no idea why it's taking this level of abuse. this is a company with car rental revenues up 32%, $300 million stock buyback. reaffirmed earnings guidance for the year, reaffirmed revenue guidance, and yet a small amount of trouble trying to sell off the advantage brand. it's a one-time charge. they're treating the stock like the story is not intact. i think they're wrong. this is a buy, anywhere around $20 a share. >> you guys agree with that, or is your money better spent in an airline rather than here? >> it's a very crowded hedge fund trade. >> not after today. >> well, we don't know -- >> -- 20%. >> it may be more crowded after today. >> it's painful. >> we had an issue after they snuck in the lower guidance. the bloom is coming off the rose. however, consolidation is important. i think it works. >> talk to me about cvs. it is up after a big -- a nice beat. >> it's about caremark. the bdm is crushing, sales to $19.5 billion. you stay with the stock. again, manage the risk on this one, trading towards the upper
end. buy protection underneath, 59.50, and stay with it. is groupon still a deal? it has been one of the biggest high flyers of 2013, but can the coupon dealer lock down the consumer shift to mobile? plus, the runway credibility continues with a blowout quarter from michael kors, and with only 50 days to go until christmas, should you be placing bets on the high end ahead of the holidays? and you do not want to miss the cnbc exclusive interview with duncan niederauer, ceo of the nyse, two days before twitter goes public. the interview comes up here at post 9 when we come back. the most free research reports, customizable charts, powerful screening tools, and guaranteed 1-second trades. and at the center of it all is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade.
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welcome back to post 9. groupon is set to report earnings later this week, and shares have more than doubled in 2013. is now the time to take some off the table heading into the big report? we'll debate it now. 1:30 is on the clock from the floor. joe, make your case. >> well, i think ceo eric lefkowski is doing. you're seeing the margin improvements and seeing the lift, in particular, in mobile visitors. and looking forward to q4, seasonally their best quarter, so even if you get a soft earnings report, which i don't expect, because we've had the estimates lowered, you want to
buy the stock. additionally, i like the refresh to the mobiles -- to the website, and the new apps appear to be working well. the gmail integration is working well. the turnaround is in place. that's why it's moving to a 52-week high. >> the new ceo, the largest shareholder, long 110 million shares of groupon. here's the thing, right? this company is -- the stock is up 100%, like joe said. margin improvement of late. but the company is priced for, like, high sales growth, and only expected to grow sales at 9%. in august, they announced moving into the direct-goods sales to consumers. so not the daily deal. they're shifting their business model. they're going to be buying warehouses to store goods. to me, this is really a grab for sales at a very low margin. think about who they're going up against -- amazon and costco. so to me, the brand's okay, the strategy's still in check. who knows if it will work out here, and they have some really
stiff competition. it will be at the expense of earnings, and that's my only point. >> in the refresh, understand this company -- [ buzzer ] -- has the ability to do the acti acquisition. 6% of sales. you have to like a company that's able to do this. >> i would take a shot on this if it gets hit on earnings. >> absolutely. >> if it move to $8 on the moving average. >> let's find out from the jury. josh brown, what do you do with this one? >> these guys both made great points, but i'd have to side with dan. i think the possibility of the turnaround has been priced in. the stock's come a long way off its low, and so, at this point, i'd probably wait to see these things actually work as owe possessi -- opposed to hoping they will. >> how do you see it? >> i think it feels better, but to me, they're trying to copy amazon's model without the credibility, and that is investing earnings into return. i'm not a buyer. >> tell us who you think won that debate. tweet us @cnbcfastmoney,
use #bull or #bear, and we'll have the results at the end of the show. let's talk retail. kors, they keep killing it, right? josh raising the outlook, as well. what's not to like? >> nothing not to like. the one thing that you could possibly say you're concerned with is the fact that the pace of growth is slowing down from 50% a few quarters ago to 20%, but that should be because the business is so much bigger. in the meantime, they can't keep up with demand in europe. they're opening stores as quickly as possible in the u.s. this is just one of the stories where they've caught a tiger by the tail. now you're seeing the licensing revenue kick in. things like eyeglasses, things like handbags, it seems unstoppable. i'm lone the stock from very low levels and i'm not selling any of it. i think there's more to come in the michael kors story over the coming years. >> how about watches? the accessories. >> phenomenal. >> so what does that mean? you look at the watchmakers did -- think about a fossil,
their earnings should be interpreted to believe that when their earnings come out, they'll be strong. >> i don't know if that's the same customer, though, to be fair. fossil is a good story on its own. the kors customer wants kors. >> it's not the customer -- >> it's the hot brand of the moment. >> i agree with you completely on kors. i agree with you on the customer, the categories across the board. but i think there are other stories that you can extrapolate from -- >> i haven't seen the chart today. guys, back in the control room, if you can throw up coach. we'll talk about that for a second, as well. gain versus pain, right? is kors' gain going to continue to be coach's pain? >> yes, we buy so many handbags in this country. we don't have an explosion in new customers. >> i would throw -- you say only by handbags -- >> maybe the market thinks they'll be double winners. >> that's a daily chart. >> i hear ya. but i think you would perhaps -- hold on, one second, dan. that on a day where kors is up quite substantially on the back of good earnings -- >> that's a good start. >> i know what the stock has done over the longer period of time.
the point being, you would think on a day like today when kors reports good news and raises the outlook, that the pain trade would be seen today in a name like kors. that's my point. >> well, listen, coach just told us, you know, things aren't great there. kors is a market share story. i would make the argument there's a finite amount of dollars out there that is, you know, looking at consumer discretionary items, and i would say apple with the refresh they had, think about it, buy joe's fancy ipad air, you know, for $600, or buy a kors bag. and there will be a lot of the tradeoff as we head into the holiday season. apple could take the share. >> let's stick with the talk about retail. less than 50 days to go before christmas, and which name should you be buying before the holiday shopping season? steve is the portfolio manager at durbin capital, and joins us with the retail roundup. welcome back, steve. >> thank you very much. >> let me get your thoughts first and foremost on kors. >> kors is a phenomenal company, phenomenal growth, 23% gain in
the u.s. and their 100% gain internationally is going to look better over the next month as you see all of the other reta retailers report neglect comps. >> are you comfortable buying shares at this level? >> i am. they're the gorilla out there. they're gaining market share. a better product, differentiated product. and as someone said a few seconds ago, they have the tiger by the tail. it's the fashion name to choose. >> you probably heard some of the commentary on the desk as we were leading into you, before that. apple was picked as one of the winners. do you agree? >> apple is really going to gain market share. i think the ipad air will be huge, and the 5s will be huge. i think, frankly, that will take a lot of -- that and the michael kors products, it will take a lot of dollars out of other retar retail retailers' pockets. we've been talking over the past few months of a new paradigm and my partner, david berman, on tv a few months ago, talking about
the same thing, you take apple, you take samsung, and you take walmart, amazon. they're taking more than 50% of the growth in retail, and i think that will accelerate into the holiday season. >> it feels like there's been a ton of negativity ahead of the start of the holiday season on what the outlook is really going to turn out to be. are we underestimating the power of rapidly dropping gas prices? >> i think -- i think gas prices are going to be a positive, and it's one of the few positives that you have in the scenario here. but i think the bigger issue is that you have all of the retailers fighting for market share. you have penney's, going to be very aggressive in the promotional sense, and all of the middle-market retailers will be hurt by that. and retailers, frankly, are -- don't have to go to the stores, even though retail is opening on black friday and thanksgiving day, even earlier now, the way kmart and sears announced. but the reality is, if you're a customer, you could just use your mobile device and you could order all of the black friday specials you want in the store and not have to schlepp all of
the bags around. you don't even have to go to the store. and that's going to be what happens and as they sell more iphones, samsung sells more devices, more ipad airs are sold, that will take the incentive for the consumer. why go through the hassle of shopping in the stores? so i think traffic will be down and business will be strong on the internet. >> steve, thanks for being here. >> my pleasure. >> all right, durbin capital. weiss, where's the retail trade? where's the money going to be made? >> it's going to be made online. you had another shooting at a mall, garden state plaza. you had the shooting in the m l mall, you know, overseas. that's an issue. i think that may scare some people out. plus, you've got a compressed number of shopping days between thanksgiving and christmas. so people that can't get out to shop, they're going to do it online. that's where the money is made, amazon. >> completely agree. it's about e-commerce, mastercard, visa, amazon, it's from the comments by the ceo. who walked back from the comments. i agree with you.
you talk about the ipad air. this was ordered thursday online, in my hands today. >> does that mean you want to buy, i don't know, u.p.s., fedex? they going to get a bump -- >> not fedex, it's gone parabolic, 30% in the last two months. i would throw a contrarian play, ebay. this company gets no love. the stock is stuck in the low 50s. if you're going to have a positive retail trade, sentiment retail trade into black friday, ebay should participate. >> you want to know you're going to get it, not that you're bidding on -- >> it's goods, you're not buying beanie babies like you were back in the '90s on ebay. >> some of the beanie babies were pretty cute. >> i know, i know. [ laughter ] coming up on "the half," the crude slide does continue. oil is lower again today, hitting a fresh four-month low. we'll head to the futures pit to the get the playbook. and an interview withnieder interview you'll only see on cnbc "the half," back in two minutes.
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and the financing to make it grow? whatever your goal, it can change more than your business. it can change the future. that's why, at barclays, our ambition is to always realize yours. welcome back to "halftime report." shares of orbitz are falling out of orbit, that's after the online travel company lost about 20 percent in early trading after it reported sales that met street estimates, but profits that missed expectations. they spent more on marketing and compensation. they said full-year sales would come in at the low end of the
previous forecasts, also below analysts' estimates, and that, overall, is leading to the dip -- at least the decline overall, scott, in the shares. back over to you. >> all right, dom, thanks. josh, discuss. >> now, this is the cheapest name in the group. as dominic mentioned, market and costs are up 12%. this is a brutally competitive business. if you think about priceline dominating and companies like orbitz having to fight it out on the second tier. i would stay out of it, not that i think it's expensive, but danger the news flow could get worse before it gets better. >> a bigger commentary. the market is unforgiving. if you're missing. we talk about tenet, hertz, now talking about orbitz. so you have to be very, very careful. now, the question is, will they bounce, can you catch a falling knife here and make some money? you can in some names. like a hertz and tenet. this one, i'm not so sure. >> something else that's falling, crude oil, hitting a fresh four-month low amid inventory concerns. let's go to jackie deangelis and
the "futures now" crew. >> good afternoon, scott. the crude crash continues. oil dropping for the sixth straight session, now at its lowest level since june. anthony at the imex, what's behind the sell-off and what will put a floor under the crude market? >> jackie, scott mentioned it coming into this segment, inventory problem, and we billed 36 million barrels, so it's about fundamentals. inventory is very high. i'm short crude oil right now, and looking to short some more of it. i think we've still got 4%, 5% to the downside. >> rachel at the cme, curious to get your take on this. what is the decline for oil means for stocks? >> jackie, i think short term, it's actually going to be negative for stocks as some of the oil names can help prop up the market. we've seen a correlation between consumption and the economy. but listen, i think longer term, it's better, the tax will be lifted, if the oil price slides, the tax removed from the economy should be better for equities, mid to longer term.
so really, support level here at 92, i think, will be the floor for the next couple of weeks. i'm not quite as bearish as rizani. >> and we'll have more on our show about crude. and joined by mark fisher, one of the biggest energy traders around, a very bold and surprising call on what's next for oil. he'll join us at 1:00 p.m. eastern, futuresnow.cnbc.com. >> we'll see you guys about a half hour from now. after this break, the moment you've been waiting for, you'll see him making his way right here to post 9, duncan niederauer, president of nyse, a exclusive on cnbc, before twitter goes public here on this very exchange. we're back with that gentleman here in a couple of minutes. ♪
[ audio difficultiy ] >> -- twitter will be going public. a big score foriederauer is goo exclusive. great to see you. >> nice to be here. >> let's assume they made a big pitch for you, as well, what makes you think you won? >> i think it was twitter's decision, but what we've proven the last few years is that -- i view this as the latest in a series of wins we've had in the tech sector. whether it's linkedin, pandora, yelp, go back to salesforce, workday, netsuite. i think we've proven to the clients in that industry we're a better partner, and now it's up to us to execute, because thursday is all about twitter and the investor, not about us. >> do you have to give more these days when you're talking about trying to score listings? it's not just about giving the
platform of twitter to the new york stock exchange. what else did you -- what did you -- what was the package you gave? >> the good news for us is, as you guys know from broadcasting here every day, this is a tech platform. it's a co-branding platform, and it's a media platform all built in, and really nobody else has that. so if that's a lot of what we give, the fact is it's all here already. i think what we talk about a lot with my team is understand what the customer's trying to accomplish, understand how you can help them, and find ways to be their partner. we think we sit on top of the biggest b-to-b network, and it's our job to mobilize that for companies like twitter and anybody else to put it to work for them. >> you have to compete with others. >> yes. >> you have to give a sweet deal, somehow, do you not? >> a lot of what we talk about with the deal is the assets we can bring to bear here every day that we've already made the investment, and it's about bringing them to bear and mobilizing them, and that translates to help with advertising sometimes? sure. marketing? sure. >> will you have a bigger presence on twitter as a result of the ipo?
>> yeah, i won't -- >> beyond the first day? >> the company already does. we're quite active. we will be keeping you and your viewers up to date live, probably with a number of us tweeting on thursday. but i think the main message i want to convey to all of your viewers is that there's an opportunity thursday in my mind with this ipo to -- to what i would call re-democraticize the equity market. you'll be right here. it will be coming to your living room, fully transparent, high-tech, high-touch, everyone will have a full set of information to know what's going on and we'll all be right here. >> you think this has a legitimate opportunity to reengage the retail investor with the stock market? >> i'm hopeful. maybe i'm too optimistic about that. but i think we've had opportunities to do that. i think the equity market has done really well the last few years, and a lot of retail investors, unfortunately, have missed it, and part of that's the industry's fault, because we haven't given them reasons to be confident. it seems very mystifying.
i think thursday's a chance to sort of let everyone behind this supposed curtain, and you'll see plenty of updates thursday, lots of live reports, and you guys will be right there with us. >> you think it has a chance to reverse some of the pain caused after facebook, the last certainly ipo of this high profile? >> i think the pain that happened there was simply that when the technology failed, there was a lack of information and transparency in the wake of that. and our main mission on thursday is from early in the morning, everyone's going to know exactly what the situation is, and they'll know throughout. so i think that's the opportunity. i don't look backwards. i look forwards. >> what are you doing to make sure this thing goes off without a hitch? >> we've done a lot. as you know, we did an industry test already. we encouraged people to bludgeon us in that test with more orders than they thought they'd ever have. we all -- it will be all hands on deck here. in fact, we have an all-hands meeting this afternoon to talk about exactly who will be doing what. and a big part of that is going to be conveying to your audience and others this is what to
expect. this is when to expect it. this is what to look for. we've tweet -- we've built what we think is a very high-touch, high-tech system here. it scales, the people on the floor, i think, will be critical in this process. we've done everything we can do to make it go flawlessly. that's our job on thursday. >> from a manpower standpoint, will you have more people around on the floor, more observers, people looking for issues? >> yeah so i'm discouraging too many observers, because the floor's already going to be crowded enough. each of the senior leadership team will be on site. we will not be off-site. we'll have specific jobs to do, so we won't be tripping over each other. and collectively, we have a good plan we've choreographed for thursday. >> this a significant achievement for you, given where the business itself is. the deal with i.c.e. hasn't closed yet. when will that happen? >> as jeff said on the call this morning, we think it's imminent. literally, that's not a turn of phrase. we need two signatures. we know who we need them from. there's nothing controversial.
we hoped we might have them by yesterday, hoped to have them by today. it's any day now, to use that cliche. >> what will that mean for you? you walked the floor since 2007. >> yeah, i have. >> you pledged to stay on, what, a year? >> i have committed to the i.c.e. board and to my board to stay on through the end of 2014, so i'll be here at least until then. and i'll be responsible in 2014, really just for the nyse piece of the new company, and then jeff will be responsible for being -- he'll be the ceo of the public company, and obviously, leaning a little more into derivatives, and i'll lean into the nyse side of things. >> what do you want your legacy to be, from what you've done from '07 to what you will do to '14, at a time when we -- we always talk about the drop in volumes and trading is down, the activity's down, et cetera. what's your legacy going to be in this place? >> it's funny, i never think of it in terms of legacy. the only thing that your parents teach you is leave every situation you're in better than you found it, right? and when i think about to december of '07, the crisis in
'08, and where we are today about to become part of what i think is the winner in the industry, globally, with a $20 billion to $25 billion market cap, i think we can safely say we did that. and along the way, you spent a lot of time here the last few years, too. this place looks nothing like it did five years ago. the technology has been completely overhauled and it's starting to pay dividends for us now, because the marketplace is aware of that. we've bought other assets along the way. we've created a culture here that wasn't afraid to try some new things. and even when we went down swinging on the deal with the germans, we got back up, dusted ourselves up, and here we are a year later, you know, ready to be, as i said, part of what i think will be the winner in the industry. i'm really proud of that. >> can you confidently say to the folks who are standing around these various posts on this floor that five years from now that this place is going to exist in its current form, if not better? i mean, you know, amid speculation and rumors about job cuts once the deal is done, et cetera? >> yeah, first of all, the folks on this floor don't work for the
nyse. when we read about job cuts and things like that, that goes with any merger. and i frankly think it's exaggerated anyway. it's interesting that you said five years, because one of your predecessors here, my first month on the job said, "so look around, five years from now, is the place going to look like this?" and i said, no, it won't look like this. it will be here. it will look better, stronger, and a better platform. we can't control volumes, and we understand the secondary market in the u.s. is fragmented, right, and it's not going to get stitched back together again. what you need to do is be nimble enough to say, what can we turn this platform into and how can our companies use it? and that's what i alluded to earlier, scott. it's a technology platform. it's a branding platform. it's a media platform. it doesn't have to just be a marketplace. and as long as it's all of those things, i'm proud of the fact that we're able to do what we're doing down here today with only 700, 800 people. i think that's great. that's nothing to be embarrassed about. >> i have to run. quickly, amid talk of the last week or so about bubbles and froth in the market. as great as the rally has been,
plus-24% for the s&p this year, what's your general thought on what you see, who you talk to, and what you think so yourself? >> before you run, it's an important question, because we get asked that question a lot. and the market, just as it will do on thursday, demands what the supply-and-demands dynamics are, the market will decide where things go. think about it, if you had gone to sleep in march '09, with the dow at 6,500, and you'd say, wow, 15,600, you'd be, like, wow, it's gone up a little bit, you know, and everyone has to keep it in context. frankly, with everything else going on in the world and the state of 9 yield curve and rates, i'm not surprised at all the equity market's up. balance sheets are strong. companies are making money. i'm not nervous about it at all right now, to be honest. but i'm not a market prognosticator. ask some of your guests at lunch. they're much more informed than i. best of luck on wednesday.
thank you, duncan. we'll have a big presence as a network. everybody is hoping it goes off, as i said, without a hitch. >> thanks a lot. up next, tesla is a high flyer, and on the other side of the break, phil lebeau will break the story down. what do investors need to hear from tesla tonight to keep that rally moving? we're back from post 9 in two minutes. weekdays are for rising to the challenge. they're the days to take care of business. when possibilities become reality. with centurylink as your trusted partner, our visionary cloud infrastructure and global broadband network free you to focus on what matters. with custom communications solutions and responsive, dedicated support, we constantly evolve to meet your needs.
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good afternoon, and welcome, everybody. "power lunch" at the top of the hour. pimco total return no longer the world's number-one mutual fund by size. we'll tell you who's the new king, and take you inside and break down the stocks in america's top fund. lockheed martin unveiling a new hypersonic spy plane six times the speed of sound. we've got incredible pictures. and we'll get this video, two planes colliding midair in wisconsin, packed with skydivers. fending for their lives 12,000 feet in the air. we'll tell all the happy outcome and show you some more details on "power lunch" at the top of the hour. scott, back to you and the "the half" team. >> all right, thank you very much. let's get to a news alert from cnbc.com's enterprise
reporter lawrence. >> so a hedge fund that was seeded by julian robertson, and once managed $1.8 billion, is throwing in the towel. axial capital management was a short-bias fund that was crushed by the bull market over the last few years. significant losses by betting against stocks, as the entire market rose, essentially. >> lawrence, thank you. and, steve weiss, it really does point to how difficult it's been to be short in an environment where the market has just rip roared. >> there's no percentage of it now. there are less stocks than there have ever been to short, just less stocks trading, because lack of m&a, you know, lots of m&a, lack of ipos. but it's the number-one issue that comes up every time i have a phone conversation or a meeting. the first thing, with hedge funds, shorting is just ridiculously tough. they don't get paid too with etfs, so very, very tough. i'm not sure short sellers are packing it up.
>> lawrence? >> what's ironic about the situation is over the last few months, investors and hedge funds are actually increasingly interested in short bias funds, so an inkling they think the rally is a bit frothy. >> and that is an interesting point. >> and actually, i'll take the other side of that. they may be increasingly interested, but much more money is going to long-only funds. there are so many funds star long-only long-only, viking, you know, there's more money targeted for long-onlys than short-sells by far. >> lawrence, thank you very much for the interesting report there on axial capital shutting down. > well, let's talk about a stock that's flying, tesla is up 415% year to date. but it has slowed. the company tonight reports their results and one in particular that the analysts will be watching closely.
phil lebeau joins us from chicago with more on that. hey, phil. >> hey, scott. really three numbers we'll focus on. the main one that you alluded to, that comes down to model s deliveries. when you're looking at the trio of three numbers, they'll come out after the deliveries that will get the attention. key on whether or not it is above or below 5700 vehicles. above it see a lot of optimism, below that, say 5400 people saying should have done a little more, gross margins they're all over the place on wall street in terms of expectations. 16 to 20% generally speaking and will tesla raise its 2013 model prediction above 21,000. officially the expectation on wall street is for tesla to report q3 earnings of 11 cents a share, come up since a month ago at 9 cents a share. analysts expect tesla's third quarter revenues to come in at $553 million. then there's the wild card after the bell, and that comes down to elon musk, the ceo of the
company. what comments will he be making on the conference call. for example, will he say something about when they are going to begin sales in china? will it happen by the end of this year? what about the model x? what about the third generation mass market car due by 2017. you put all that together and that's why a lot of people are looking at shares of tesla which are up about 19% in the last three months, lot of people are looking at this conference call and saying if they blow those numbers out of the water, expect this stock to go dramatically higher. this is one of those cases where the momentum has already been built into the expectations. people are saying, we're going to get huge numbers from tesla after the bell. if they're not huge, i'll be interested to see what stock does. >> the other quick thing, phil, that people will be listening for, if he pulls a reed hastings and tries to talk downs his stock based on the momentum investors that have pushed this stock higher than most people thought it could go, at least in the near term. >> i don't think he's going to do that. based on listening to the past conference calls i think he's going to stick just to the
products and the production and there may be a few comments about the stock price but i don't think he's going to try to talk it down. >> probably asked about it, see what he says. thanks so much as always. >> you bet. >> coming up the eu slashing its growth forecast this morning and we'll hear from one money manager who says that's just the tip of the iceberg for eu turmoil. ahead where she's still banking on putting her money to work coming up next from at post 9. asional have constipation,
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time for our halftime playbook focusing on the xs and os of europe. fresh concerns are being raised about the state of the economies there. helping us game plan your strategy on how to trade those markets is katrina dudley, a manager with franklin mutual advisors. nice to talk to you. >> thanks for having me back. >> what should we make of the recent worry from exists over the economies over there and also the stronger euro is really going to hurt things? >> it is going to start to hurt things. we are expecting the market to go through a consolidation phase. we've had a 20% rally since the beginning of the year, 40% from the lows in june, and so we think it's time for europe to kind of just be flattish as investors find that wall of worry. >> what's the impact of the stronger euro? the eu commission was out today forecasting that it's not only going to rise between now and the end of the year but that next year, it's going to continue that rise? >> it's a worry for us from the exporter point of view. a stronger europe makes things a little less competitive but we are actually fairly bullish on
european companies because we see a lot of opportunities there. we are looking at a lot of their earnings, on an roe basis, 9% in europe. >> where would you be invested if you want to put money to work? >> we're stock pickers. stocks traded at a discount to their value. we own great names like an ap molar, a shipping company, trades at a 40% discount to the sum of the parts and we think there's a lot as they focus on improving the concerns on cash and the stock even though it's had a big move year to date we see a lot of upside. >> see what happens. katri katrina, thanks so much. on the other side of the break do final trades and pick the winner of the debate as well when we examine back here to the new york stock exchange. she's always had a playful side.
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but it doesn't usually work that way with health care. with unitedhealthcare, i get information on quality rated doctors, treatment options and cost estimates, so we can make better health decisions. that's health in numbers. unitedhealthcare. all right. welcome back. we've tallied the results. you have said that dan nathan the bear won the debate on
groupon. >> overwhelmingly in a blowout. >> give us a final trade, dan. >> you know cisco into next week's report play it long into it. not there though. >> ecl i'm buying it going higher. >> steve weiss. >> stay short the bond market tbf long. >> joe. >> starbucks wants to go back up again. >> have a great day. "power" starts now. >> "halftime" is over and "power lunch" and the second half of the trading day starts right now. >> golly, that whistle was loud in my ear. going to turn it down a little bit. move over pimco total return, there is a new king in the world of mutual funds and this one may say a lot about how bullish america is on the stock market. we'll talk about that. hash "time" magazine probletag twitter ipo more reasons for anyone thinking of getting in to think twice. and beating the bully at work, maybe you've heard this story it stems from a series of incidents involving the miami dolphins.